France attracts many investors and new residents every year. According to the latest results of the EY barometer, France is the most attractive country in Europe for the third consecutive year with 1,222 investment projects identified in 2021, an increase of 24% compared to 2020.
In addition to its rich historical past, France (also known as the country of human rights) boasts many assets, such as numerous cultural and sporting events, a variety of landscapes and possible activities, gastronomy and wines that will delight gourmets, and finally, access to a low-cost health care system. For those looking to relocate with their family, France is famed for having one of the best education systems in Europe. For those looking to further their career or enjoy their retirement, there is something for everyone.
What we do
Whilst its culture, history, art, unique sites, and incredible cuisine may sound irresistible, it is worth noting that France has one of the most complex and expensive tax regimes in Europe. Taking personalised advice is vital, especially in the ever-changing environment we now live in.
At MWC Group, our team of regulated advisers can assist in providing you advice specific to your circumstances. Whether you are moving to France or settled there, our inhouse advisers speak English and French and can assist you on how best to structure your assets to meet your long-term objectives and financial goals. MWC group is an independent company that offers their clients an audit of their assets and provides a financial planning report given their financial objectives such as preparing retirement, financing the children’ studies, starting a business, or optimising estate. MWC Group advisers will analyse your personal situation, consider financial objectives, identify investor profile and personal challenges, and then prepare a bespoke solution.
- Wealth Management
- Financial Planning
- Asset Management
- Investment Advice
- Loans and Mortgage Brokers
- Insurance Agents
What you will find in the guide
Our tax guide will help you to know more about the French tax system and financial framework.
- Capital gains and investments tax
Since 2018, investments income, interests, dividends, and capital gains are taxed at a flat rate of 30% (12.8% being income tax, 17.2% being social charges). There is an option for the progressive rate, but this rate applies on all capital gains.
- Capital gain tax on the land or property sale
The capital gain you make when you sell a property is taxable, unless it is your primary residence: the place where a person lives on a stable basis, but which is not necessarily their main place of residence. You may benefit from exemptions depending on the nature of the property or your personal situation.
- Wealth and property tax
Before 2018, the wealth tax was calculated on the valuation of all type of assets such as property, savings, investments, cars, jewellery. It has been simplified and replaced by a real estate wealth tax. Studies have shown that there were many unoccupied homes in France despite the growing demand for accommodation and need for housing. This tax has been created to boost the sales of properties and encourage people to invest in the real economy and business through mutual funds or stocks, that are now exempted from this tax.
Real Estate Wealth tax is payable by French residents with worldwide real estate assets that worth over €1.3milion. Although French wealth tax is triggered at €1,3 million, it’s only the first €800,000 of the combined value of all your property that’s tax-free. Also, there is a deduction of 30% of the primary residence. In addition, home loans are deductible for the calculation.
- Succession and inheritance tax
France has some of the highest succession tax rates in the European Union. If you plan on remaining in France for the remainder of your lifetime, it is important to think ahead and make the necessary arrangements to try and limit the tax burden on your chosen beneficiaries. If you die whilst French resident, each beneficiary will have to pay succession tax on any assets that are inherited, whether in France or abroad for non-residents, many bilateral tax treaties with France provide exemptions for paying French tax on worldwide assets. However, some envelopes as the assurance vie or as the retirement plan “Plan d’épargne retraite” exist to offer tax efficient investment options regarding income and succession tax.
- Assurance vie
For more than 20 years, assurance vie have been the most attractive financial investments for French residents, or French expats. Assurance Vies are insurance-based investment products commonly used in France. They act as tax efficient investment wrappers that contain one or more underlying investments. Anyone who is tax resident in France may hold an Assurance Vie. Assurance Vies carry several tax benefits, including favourable tax treatment when withdrawing your money after 8 years since inception, and significant succession tax allowances for contributions made before the age of 70.
Total assets in Assurance Vie as of August 2022
More than 45% of French people have subscribed to one or more Assurance Vie. France Population 67.5M
In the first half of 2022 contributions reached their highest level since 2010. 96BN€ Jan to Aug 2022
Mutual funds invested through Assurance Vie since the beginning of 2022
Of mutual funds in contributions.
The assurance vie serves several purposes as:
- Purchasing a property
- Financing the studies of the children
- Preparing additional incomes for retirement
- Anticipating the inheritance
Here are a few advantages:
- Flexibility in the contributions or withdrawals,
- Personalized portfolio, and the access to a large universe of investments,
- Making the capital work without increasing the income tax burden
- Reducing inheritance tax and optimizing the transmission with the beneficiary clause
The Guide also covers
- Income tax on salary and for self-employed
- Rental income tax (furnished or unfurnished rentals)
- Local taxes
- Social security contributions
- Tax on goods and services
- Occupier’s tax
- French tax deduction, tax reduction and tax credit: childcare costs, school fees, credit for work linked to energy transition, reduction linked to a rental investment, deduction of contributions in a retirement plan PER.
The content of this guide is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing in this guide constitutes a solicitation, recommendation, endorsement, or offer by MWC Group or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the laws of such jurisdiction. Please contact your own lawyer, accountant, or tax professional with any specific questions you have related to the information provided that are of legal, accounting or tax nature. The content of this guide is of a general nature and does not address the circumstances of any particular individual or entity. All information of this guide is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information. By reading this guide, you agree not to hold MWC Group, its affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you by this guide.